Moody’s: Saudi insurance market has “untapped potential”

Insurance penetration is only 1.1 percent

Low penetration and changing regulation means Saudi Arabia’s insurance market has lots of room to grow, a Moody’s report revealed. Last year, premiums increased by 20 percent to $8.1 billion, but penetration rates are just 1.1 percent.

“Despite this significant growth, Saudi Arabia has the lowest insurance density in the GCC and one of the region’s lowest penetration levels,” says Mohammed Ali Londe,  author of the Moody’s report. “This suggests that there is a high degree of untapped potential in the market.”

The country’s insurance growth stems from the government making health and car insurance mandatory, a strong economy, an increased awareness of the benefits of insurance products, and careful actuarial reserve modelling.

Saudi Arabia currently has 37 insurance and reinsurance companies, 76 brokers and 76 insurance agencies. Moody’s predicts some market players will be absorbed by competitors or simply leave the industry.

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